Good Credit is Important
Borrowing money is very tough in this economic environment but it’s not impossible. If you have good credit scores, you will still get a good rate and be able to buy a house or your dream car. Here are several ways which you can accomplish this.
Credit monitoring services like ones from myFICO is very good because it automatically keeps track of your credit report and alerts you whenever there are any changes. You can of course choose to do it yourself but that’s 1000x harder.
Every year, you can get one credit report from each agency (there are three total). If you spread it out and get one from each company every couple of months, you can theoretically keep track of your scores and stay on top of it without much time in between.
Lenders will just pull your report when you request a loan, so if you are maxed out on your credit, they see it as a no-no. It doesn’t really matter if you pay off your credit cards every month because the utilization rate will be very high.
When companies pull your credit report, that activity is recorded and affects your credit score. Therefore, it is advised not to apply for any other type of credit before you make a big loan. Especially many credit card applications in a short period of time. That’s a huge red flag for credit companies. Don’t do it.
Use all your credit cards because having cards canceled on you is not a good sign that you are a good borrower. This will in turn lower your score.
Having more than one credit card will actually help your credit. Lenders will sometimes look at your credit report and deny you because you don’t have enough different forms of borrowing. They see a lack of information as a negative so even though you may have a ton of cash somewhere to pay off any loan, the absence of proof is a big drawback.
Different types of borrowing will help your credit scores because it shows that you have debt and are proven to be able to manage it. Without it, lenders really won’t know how you will react when the big bills come due every month.
